Australian Leading Index Falls

123jump.com Staff
15 Apr, 2009
New York City

Rio Tinto reported a sharp fall in mining output in iron ore, aluminum and copper and coking coal output rose. Leading indicator index in Australia fell sharply in February as the economy struggles with falling domestic demand, tight lending conditions and weak exports growth.

[R]3:00AM New York, 7:00PM Sydney- Australia’s Leading Index indicator falls in February.[/R]

Australian stocks fell marginally after a report showed that the country’s gauge for future economic activity dropped more than forecasted in February. However, commodity stocks pared losses after dropping sharply in the morning trading.

In Sydney trading ASX 200 index fell 0.1% or 5.4 to 3,747.50.

Of the ASX 200 index stocks, 96 gained, 88 declined, and 17 were unchanged. Aquila Resources led advancers in the index shares with a rise of 14.5% followed by Panoramic Resources increasing 14%.

The Australian dollar declined to 72 U.S. cents after the release of the report but managed to close at 72.38 U.S. cents.

Rio Output Falls in Q1

Rio Tinto Group reported third quarter mining output declined. Iron ore output declined 15% to 31.6 million metric tons from 37.4 million tons a year ago quarter after peaking in third quarter of last year at 42.4 million tons.

Copper output at all mines controlled by the company increased by 9% 196,000 tons despite a drop in 34% production at a mine in Chile. Aluminum output in the first quarter ending in March declined 6% to 948,000 tons as the company responded to market weakness with production cuts.

Australia’s Leading Index Falls in Feb

Westpac reported today that the Westpac-Melbourne Institute Leading Index, which measures economic activity for the next three to nine months, dropped at annual rate of 5.1% in February. The index declined to 248.6 from 294.4 in January.

The Australian economy is forecasted to contract 1.3% this year, but “the recession will be less damaging than the one in the early 1990s.

According to the report, of the eight components of the leading index, major contributors of the decline were fall in overtime worked by 1.4%, in industrial production by 1.1%, in commodity prices 0.9%, in productivity by 0.8%, in share prices by 0.7%, in corporate profits by 0.7%, and in dwelling approvals by 0.1%.

Two of the four components increased in February, with real money supply advancing 1.2% and dwelling approvals jumping 7.8%.

The Coincident Index fell 1.1 percentage points as real retail trade dropped 2.2% and the unemployment rate gained 4.8% to 5.2%.

Westpac expects the Reserve Bank of Australia to hold the rates at 3% in order to reserve the capacity to boost confidence in the second half of 2009.

Few Home Borrowers Face Negative Equity

Reserve Bank of Australia head of financial stability department Luci Ellis reported today that Australian homeowners are sufficiently cushioned from falling house prices and few home borrowers face negative equity.

“There are signs that Australian banks and other lenders have become more risk-averse and they have tightened lending criteria somewhat. However, it appears that good-quality borrowers can still obtain and roll over credit,” explained Luci.

Gainers & Losers

Aquila Resources Ltd. led advancers in the ASX 200 index shares with a rise of 14.5% followed by gains in Panoramic Resources Ltd. of 14%, in APN News & Media of 12.9%, in Atlas Iron of 11%, Kagara Ltd. of 10.5%.

Resource stocks gained. Arrow Energy edged up 7.2% and Sino Gold jumped 5.3%.

Karoon Gas Australia led decliners in the ASX 200 index shares with a fall of 13% followed by losses in Macquarie Countrywide of 8.3%, in CFS Retail Properties of 7.8%, in Goodman Group of 7.1%, and Energy Resources Australia of 6.8%.

Commodity stocks plunged as crude oil prices fell 1.3% to $49.4 per barrel. Centennial Coal plunged 5.2% and Avoca Resources shed 3.9%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 99.72 or 1.13% to 8,742.96, Hang Seng index in Hong Kong increased 89.46 or 0.57% closed to 15,669.62, CSI 300 index in China higher 10.12 or 0.38% closed to 2,686.99. ASX 200 index in Australia decreased 5.40 or 0.14% closed to 3,747.50. The KL Composite index in Malaysia higher 2.97 or 0.31% closed to 956.68.

The Kospi Index in South Korea decreased 9.54 or 0.71% to close at 1,333.09.JSE Index in Indonesia increased 23.40 or 1.49% closed to 1,593.66. The Sensex index in India increased 317.51 or 2.90% closed to 11,284.73.The Markets of Thailand were close today.